Section A- Multiple Choice Questions - Answer ALL questions Instruction for Section A: Write the correct answer for each question in your answer book. 1. The CAPM model can be used to derive the cost of capital. A. Equity B. Borrowed C. Total D. Unlimited 2. A bond was issued at a par value of OMR100 and is due to mature in five years. It pays 8% interest per annum and is currently trading at OMR105. What is the face value of the bond? A. OMR105 B. OMR140 C. OMR 108 D. OMR100 3. Which of the following securities do not provide tax advantage to the company? A. Bond B. Equity Shares C. Bank Loan D. Debentures 4. High-yield (junk) bonds are rated as A. Below investment grade by rating agencies B. Above investment grade by rating agencies C. At par with investment grade by rating agencies D. Not rated by rating agencies 5. Which of the following key decisions is a financial manager unlikely to make? A. How much finance should be raised. B. What type of finance should be raised. C. Plan and coordinate an organization's workforce. D. How much finance should be invested in a project. 6. What is the present value of a OMR 1,000 ordinary annuity that earns 8% annually for an infinite number of periods? A. OMR80 B. OMR800 C. OMR1,000 D. OMR 12,500